Refer to the given data. If the prices of labor and capital are $9 and $15 respectively, the profit-maximizing firm will hire:
A. 5 units of labor and 3 of capital.
B. 5 units of labor and 2 of capital.
C. 4 units of labor and 4 of capital.
D. 3 units of labor and 4 of capital.
A. 5 units of labor and 3 of capital.
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Refer to the scenario above. The opportunity cost of producing one pound of apples in Beta is:
A) 1/2 pounds of oranges. B) 15 pounds of oranges. C) 10 pounds of oranges. D) 2 pounds of oranges.
If Crunchy Fries agrees to sell its frozen potato fries to a large grocery chain on the contractual condition that the grocery chain does not sell any of Crunchy Fries' competitors' frozen potato fries, this is an example of ________.
A) a tying arrangement B) a horizontal contract C) a requirements contract D) an exclusive dealing contract
Two cities A&B are deciding upon joint pollution laws. Right now they both face identical prices for their housing. If they decide that city A is to be a pollution free city "Clean town" and all the factories would locate in city B "Smogville", in the long run, we expect to see
a. Asthmatics moving to Cleantown b. Poorer families moving to Smogville c. Residents in both the cities relocating based on their tolerance for pollution d. All of the above
The wealth effect and the interest rate effect are changes in the price level that:
a. bring about a movement along the aggregate demand curve. b. lead to a shift of the demand curve for a particular good. c. result in a shift of the aggregate supply curve. d. help explain the vertical shape of the long-run aggregate supply curve. e. cause a movement along the aggregate supply curve.